Identifying practical applications where agrivoltaics delivers measurable value, resilience, and long‑term growth potential
Accelerating renewable energy and sustainable food production to meet global demand
As global energy demand continues to rise, and governments accelerate the transition to renewable energy, agrivoltaics (APV) are emerging as a compelling investment opportunity with the market gaining significant momentum. The global APV market was valued at USD 4.6 billion in 2024 and is projected to grow to USD 5.1 billion as of 2025. Looking ahead, the market is expected to reach approximately USD 13.9 billion by 2034, reflecting a robust compound annual growth rate (CAGR) of 11.7% from 2025 to 2034[1].
Development in the size of the APV market. Source: Precedence Research
According to the International Energy Agency (IEA), global renewable energy supply grew by more than 5% in 2023, increasing its share of the global energy mix by nearly 0.2 percentage points to 5.7%. The IEA further projects that global renewable power capacity will double by 2030, driven primarily by solar PV. Solar PV alone is expected to account for nearly 80% of total capacity additions and to more than double in installed capacity over the next five years. As illustrated in Figure 1, the expansion of APV capacity is also expected to support this trend, underscoring that continued – and increasingly accelerated – deployment of solar PV remains essential to global efforts to combat climate change while meeting rising energy demand.
However, despite this positive near-term outlook, the IEA emphasizes that achieving the Net Zero Emissions (NZE) scenario by 2050 will require a significant acceleration in deployment, with annual renewable energy growth increasing to approximately 15% between 2024 and 2030[2]. As solar PV is currently the only technology on track to meet the NZE target, it remains the favored energy source by developers and investors. APV therefore aligns naturally as an additional pathway for accelerating solar deployment. Achieving the NZE target will require a significantly faster rollout of all renewable technologies, and solar PV is particularly well positioned to drive much of this progress.
Simultaneously, the OECD and The Food and Agriculture Organization (FAO) project a 14% increase in global agricultural and fisheries production over the next decade. This dual pressure from renewable energy and increasing food production intensifies competition for land [3].
As highlighted by the OECD and FAO, meeting future food demand will depend heavily on innovation and technological progress in agriculture. With APV combining agricultural production and solar energy generation on the same arable land, it represents a timely opportunity to address these challenges by offering an innovative and efficient solution to the increasing competition for land.
This article is the first in a two-part series on the potential of APV, aiming to expand awareness of the concept and highlight its relevance as an emerging investment opportunity. This article focuses on the commercial landscape of APV. It examines real world opportunities and challenges, and outlines the key considerations required to build a robust business case, including cost offset strategies, optimal crop selection, ownership and partnership structures, and practical examples of successfully executed projects.
The untapped potential of agrivoltaics
The expansion of solar energy generation through APV aligns well with the global trajectory of rising renewable energy demand. Solar PV has been the fastest-growing renewable technology and is projected to become the dominant source of electricity generation by 2035[2],[4]. However, the rapid expansion of solar PV has also triggered growing public opposition to large‑scale solar parks, driven by concerns over the loss of farmland and changes to natural landscapes. This debate has been ongoing and has recently received renewed attention in Danish media and politics[5]. These conflicts over the conversion of agricultural land into solar farms is not just limited to Denmark. While APV may not satisfy every critic, it offers a pragmatic compromise: protecting the land’s primary agricultural function while mitigating climate change, which is single greatest long-term threat to global agriculture [6].
APV holds significant potential to help meet our growing energy needs in a sustainable way. By integrating solar panels directly into existing agricultural land, APV enables the production of renewable energy without significantly reducing agricultural output – unlocking a powerful dual‑use approach that preserves both energy generation and agricultural productivity. In the EU, more than 40% of total land area is dedicated to agriculture[7] and recent research from the European Commission’s Joint Research Centre indicates that installing APV systems on just 1% of this utilized agricultural land, equivalent to ~15,700 km2, could generate around 950 GW of installed solar capacity, compared to EU’s 2030 solar energy target of 720 GW[8].
The technical potential for installed APV capacity across the EU’s UAA and subcategories at 5% and 1% coverage levels. Calculation is based on a power-to-land ratio of 0.6 MW/hectare. Area and potential capacity values are rounded. Table adapted from Chatzipanagi, A., Taylor, N., and Jaeger‑Waldau, A. (2023).
This means that approximately 130% of the 2030 target could be met with just 1% of the EU’s utilized agricultural land, and more than 660% of the target could be met at 5% coverage.
This underscores APV’s transformative potential to expand renewable energy without sacrificing agricultural land or creating land-use conflicts. Recognizing this, the EU Solar Energy Strategy has called on member states to promote APV through dedicated policy frameworks. Several major countries, including Italy, Germany, Spain, and France, have already integrated solar PV into their strategic plans[9]. Furthermore, EUR 1.1 billion in funding under the European Green Deal has been allocated to APV initiatives[10], creating a significant opportunity for stakeholders to engage in and benefit from this emerging sector.
By aligning energy and food production goals, APV provides a strategic pathway to tackle pressing global challenges. Leveraging these opportunities should guide future investment strategies and policy frameworks that advance sustainable development and optimize land use.
Key challenges shaping the future
While the opportunities are substantial, several structural challenges must be addressed to fully unlock the potential of agrivoltaics. These predominately include local and public opposition, often driven by the “not in my back yard” (NIMBY) effect, along with bureaucratic and regulatory hurdles, cost barriers, and questions around investment attractiveness.
Local and public opposition
Large-scale solar PV projects often face local and public opposition and the NIMBY effect. Common concerns include land-use conflicts, visual impact on landscapes, negative impact on biodiversity, and perceived competition with food production. Thus, building public awareness and fostering acceptance are critical, as uncertainty and resistance among stakeholders can discourage investment and slow implementation. To address this, targeted outreach, strategic campaigning and education that highlight the benefits and synergies of APV systems are essential. Such efforts can significantly improve public engagement and accelerate the adoption of this technology. Recent research also supports this.
A report from the Institute for Energy Economics and Financial Analysis found that APV can reduce community opposition to solar projects on farmland while simultaneously creating new income streams for rural stakeholders[11]. By enabling farmers to produce solar energy alongside crops or livestock, APV provides a more stable and predictable source of income in an otherwise volatile agricultural sector, all while preserving agricultural productivity. At the same time, communities retain active farmland and benefit from local investment, job creation, and tax revenue associated with solar development.
Regulatory challenges and bureaucracy
Regulatory challenges primarily stem from the absence of international standards, fragmented policy frameworks, and limited incentive programs[8],[10]. The lack of global standardization, combined with rigid, inconsistent, and continuously evolving regulations, creates substantial barriers to APV propagation.
At EU level, each member state develops its own approach, resulting in significant legislative divergence. While countries such as Germany, France, and Italy have established relatively advanced frameworks, many others are still in the process of drafting or defining APV‑specific legislation[12]. This regulatory complexity and bureaucracy inhibit streamlined permitting, complicates subsidy and support mechanisms, and slows compliance processes and technological innovation. Although the regulatory landscape includes existing incentives – such as the European Green Deal and national programs in Italy, France, Germany, the USA, Japan, India and China – which provide some support[10],[13], however, more targeted schemes are needed.
Clearer definitions and global standards would strengthen implementation and foster innovation. For example, dedicated incentives for elevated APV systems could improve land-use efficiency and unlock full synergies between agriculture and solar energy generation.
Beyond regulatory and social barriers, the financial attractiveness of APV remains the primary catalyst for growth. The following sections will explore this in greater depth, focusing on the strategic actions required to enhance the viability and appeal of APV investments.
Structuring an agrivoltaics business case
Building on the potential, opportunities, and challenges outlined above, we now turn to how real‑world APV development depends on several critical factors and decisions that determine whether a project can mature into a robust business case. Ensuring economic viability requires integrating multiple inputs, with some of the most important considerations including:
- Climate and geological assessments
- Technical design optimization
- Financial cost and revenue analysis
- Risk assessment
- Stakeholder engagement
Structuring an APV business case involves balancing these factors with the project’s strategic and financial objectives, as well as the priorities of both the farmer and the PV developer. Successfully addressing the challenges associated with APV depends on a thorough evaluation of each individual project. As such, early and sustained focus on these considerations is essential to securing long‑term project success. Because business‑case optimization can be complex and time‑consuming, clear industry guidance is needed to help stakeholders evaluate all relevant inputs effectively.
Offsetting CAPEX premiums
From an investment standpoint, the business case hinges on revenue and cost streams. For APV, the primary differentiator compared to conventional PV is a CAPEX premium driven by specialized mounting systems and advanced solar panel configurations. Consequently, the viability of an APV business case depends on the ability to offset this premium. Since waiting for future technological breakthroughs is not a viable strategy, several immediate mechanisms can mitigate CAPEX. These include, but are not limited to:
- Strategic land access – APV allow developers to unlock high-irradiance agricultural land that is typically restricted or unavailable for conventional solar. This expanded access enables superior energy yields and creates diversified revenue streams, effectively mitigating the CAPEX premium through higher-quality site selection.
- Enhanced agricultural yields – Synergies between crop management and PV configurations can boost yields beyond conventional farming levels. This increased productivity, coupled with potential revenue-sharing or discounted land leases, directly offsets the CAPEX premium.
- Land lease discounts – This mechanism is mostly implemented through shared ownership models (see section further below) or revenue-sharing agreements with farmers, both of which can help reduce overall project costs.
- Operational efficiencies and resilience – Integrated crop-livestock-PV systems drive cost savings through improved water retention and reduced soil erosion. Furthermore, shielding crops and personnel from extreme weather bolsters long-term resilience, strengthening the business case for both developers and landowners.
- Incentives and subsidy programs – As highlighted with the European Green Deal, APV projects can benefit from both domestic and cross-border financial support through incentives and subsidy schemes designed to promote and accelerate the adoption of APV.
Selecting the most profitable crop
While CAPEX remains the primary focus for renewable energy developers, farmers face an equally critical decision: selecting the right crop and agricultural activity, based on local climate and geological conditions, to maximize the benefits of dual land use. This is particularly important because solar panels can function as a protective canopy. As a result, APV systems can enhance land productivity by shading crops, reducing evaporation, and lowering water demand. By moderating temperature extremes and limiting wind exposure, these systems can improve crop resilience and, in many cases, significantly increase yields[14]. Additionally, crop‑based agrivoltaics can reduce heat stress on solar panels, which helps prevent efficiency losses in high temperatures and can lead to an estimated 2% increase in annual energy generation[11].
When it comes to selecting the right crop, and contrary to common perception, the partial reduction in sunlight caused by solar panels does not necessarily have a negative effect. In fact, certain crops can benefit from moderate shading and may perform better under these conditions. When the daily light integral, a measure of the total usable light received by plants each day, remains within optimal ranges, crop yields and quality can in fact improve[15].
Research indicates that crops benefiting most from synergy with photovoltaic systems are typically low-growing species, such as:
- Forage crops – Corn, barley, oats, clover
- Herbs – Rosemary, sage
- Vegetables – Peppers, lettuce, courgettes, potatoes, tomatoes, beets
- Short fruit-bearing plants – Berries, wine grapes
- Succulent plants – Aloe vera (for cosmetics and pharmaceuticals)
The impact on crop yield can vary depending on weather conditions, farming practices, soil quality, and a wide range of other factors. However, research has demonstrated yield increases of 20% to 60%, underscoring the potential financial benefits for farmers. Furthermore, a distinct advantage of APV over conventional solar is the cultivation of forage, aromatic, and medicinal plants. These landscapes create vital habitats for pollinators, driving biodiversity conservation and generating significant positive externalities [16],[17].
Although this field continues to evolve, research has already provided valuable insights into which agricultural activities, and specifically which crops, are best suited for APV projects. At the same time, PV module technologies are advancing rapidly. Innovative solutions that allow more sunlight to reach crops have already emerged, although their pricing is not yet cost‑competitive at utility scale. Nevertheless, this underscores the highly dynamic nature of the solar market, and meaningful cost reductions can be expected if development continues in this direction.
Real-world examples of successful agrivoltaics implementation
By drawing on empirical evidence from real-world applications, this demonstrates the potential of agrivoltaics from both an environmental and economic perspective:
- At Domaine de Nidolères in Southern France approximately 6,000 solar panels have been installed across 7 hectares of vineyards. The panels provide shade that reduces water stress and prevents sunburn on grapes, resulting in higher‑quality produce and wine. The shading also lowers soil evaporation, thereby reducing irrigation needs[18].
- At Flakkebjerg Agri‑PV, Denmark’s largest APV test center, it serves as a research and innovation hub where academic institutions and private companies collaborate to study how solar panel shading influences crop performance. The facility also assesses biodiversity impacts in areas not accessible to agricultural machinery[19].
- In Dongying City, Shandong Province, China solar PV panels installed above shrimp and sea cucumber ponds generate 260 GWh of clean energy annually while lowering water temperatures. This cooling effect, combined with infrastructure upgrades funded by the solar developer, has increased harvests by 50% and reduced overall farming costs[20].
As with many emerging technologies, ongoing research and investment from private and public institutions, universities, and foundations continue to strengthen the scientific foundation for identifying optimal APV system configurations.
Structuring an agrivoltaics business case
As with any capital-intensive opportunity, selecting the appropriate business model is essential for success. Carefully evaluating APV ownership structures and operational frameworks is critical to ensuring seamless project deployment and long-term financial performance. As illustrated in Table 2, there are three primary business models, which are the most common and widely adopted approaches in APV projects [21],[22]:
Energy producer owns and operates the APV project
This model is widely adopted and can be applied across all APV archetypes. Its primary objective is to generate renewable energy while maintaining and sustaining agricultural activity.
Under this structure, the farmer leases land to the developer, who owns and operates the PV system, while the farmer continues agricultural activity. Each party covers the costs and risks associated with their respective activities, although these can be shared through contractual agreements.
This model is suitable for projects of any scale but is most commonly implemented in medium- to large-scale developments, where economies of scale enhance financial viability. This structure is also the easiest to implement, as each party can focus on its core competencies. While collaboration remains essential, responsibilities are allocated where they most naturally belong, which in turn enables the development of large-scale APV projects.
Overview of different APV business models. Source: Blue Power Partners with inspiration from SolarPower Europe’s Agrisolar Handbook
Joint venture between a farmer and an energy producer
This model is more innovative and, while not yet as widely adopted as the first model, offers strong alignment between the farmer and the solar PV developer. However, it also introduces a higher degree of complexity and risk. Under this structure, the farmer and the developer jointly own both the energy and agricultural outputs, sharing profits and risks in accordance with a negotiated agreement.
While this approach fosters collaboration, it requires robust governance, detailed shareholder agreements, and clear exit provisions. Unequal capital contributions – given the high investment required for PV installations – can create tension and conflicts between parties. Therefore, a predetermined framework for waterfall distributions and risk allocation must be established before the partnership begins.
This model is suitable for projects of any scale.
Farmer owns and operates the APV project
This model is relatively rare but holds significant potential, particularly for small-scale projects below 1 MWp. Its core objective is to enhance farming operations while generating renewable electricity for on-site consumption or, in some cases, sale to the grid.
This approach is typically most feasible for medium- to large-scale farmers with sufficient investment capacity, as it requires upfront capital and technical expertise to develop the PV component. This would also typically entail that external expertise and resources are required, such as advisors, technical specialists, and access to public incentives, to successfully finance and execute the project.
As the different models show, selecting the right ownership structure and business model is crucial for any APV project and the probability of successful execution. The chosen structure must ensure clear alignment of interests and long‑term commitment among all involved stakeholders while establishing a transparent framework for sharing risk, cost, revenue, and responsibilities. A well‑designed model can also unlock opportunities to deploy solar PV in areas that might otherwise be unsuitable, while enhancing both agricultural yield and financial returns, provided stakeholder engagement is strong, and governance is clearly defined.
Conclusion and the path forward
Renewable energy and sustainable food production are complex, global challenges. Navigating them requires more than technical expertise, it demands strategic thinking, collaboration, and a clear understanding of value drivers.
This first article explored the commercial dimension and real‑world application of agrivoltaics, along with the foundational components of successful APV business cases.
To deepen the insights into this topic, the next installment in this series will shift its focus to the more technical aspects of APV and the concept of coexistence between solar energy and agriculture. It will examine how the two interact, and the opportunities and challenges this relationship creates.
Gonzalo Reyes
Head of Solar
T: +34 623 458 021
E: gre@bluepp.dk
Oliver Lønstrup Thorsen
Lead – Valuation
T: +45 31 43 98 37
E: olt@bluepp.dk
Jonas Barslund
Valuation Associate
T: +45 22 22 54 09
E: job@bluepp.dk
Bibliography and sources
[1] Precedence Research: Agrivoltaics Market, Precedence Research 2025
[2] International Energy Agency: Energy system / Renewables, International Energy Agency 2025
[3] OECD and FAO: OECD-FAO Agricultural Outlook 2025-2034, 2025, OECD Publishing
[4] International Energy Agency: World Energy Outlook: executive summary 2024, 2024
[5] Danish Broadcasting Corporation (DR): Solar cells as far as the eye can see: Local communities oppose plans for large solar power plants – and hope it will sway votes (originally in Danish),
DR 2025; DR: ‘No to iron fields, yes to cornfields’: Støjberg rails against the government’s solar cell plans, DR 2024
[6] RWE: Are Solar Farms Really Displacing Agricultural Land? RWE 2026
[7] World Bank Data: Agricultural land (% of land area) – European Union, World Bank Group 2025
[8] Chatzipanagi, A., Taylor, N. and Jaeger-Waldau, A.: Overview of the potential and challenges for Agri-Photovoltaics in the European Union, 2023, Publications Office of the European Union (Luxembourg)
[9] Agrisolar Europe, Agrisolar Europe 2025
[10] Aquila Capital: Agrivoltaics – The future of Agriculture? Whitepaper, 2023
[11] A. Salkin: Agrivoltaics: An economic option for farmers and rural development, 2025, Institute for Energy Economics and Financial Analysis (IEEFA)
[12] Glint Solar: Agri-PV Industry Insights: Expert Analysis of Trends, Challenges & The Top 10 Questions Answered, Glint Solar 2025
[13] Tata Power: What is agrivoltaics: The future of farming and solar, Tata Power 2025
[14] PVcase: Agrivoltaics in Europe: a closer look at the facts and figures, PVcase 2025
[15] J. Widmer, B. Christ, J. Grenz, L. Norgrove: Agrivoltaics, a promising new tool for electricity and food production: A systematic review, 2024 Renewable and Sustainable Energy Reviews
[16] Enel Green Power: All the benefits of agrivoltaics, Enel Green Power 2025
[17] Enel Green Power: Sicily is producing renewable energy and good wine, together, Enel Green Power 2024
[18] Domaine de Nidolères
[19] J. R. Jørgensen et al.: Agrivolt: A New Agrivoltaic Research Project and Test Facility with Sun-Tracking Panels in Denmark, 2025, Published at AgriVoltaics World Conference 2025
[20] World Resources Institute: Dual Harvest: Agrivoltaics Boost Food and Energy Production in Asia, World Resources Institute 2024
[21] Trommsdorff et al.: Agrivoltaics: Opportunities for Agriculture and the Energy Transition, 2024, Fraunhofer Institute for Solar Energy Systems ISE
[22] SolarPower Europe: Agrisolar Handbook, 2024 Agrisolar Europe: Agrisolar in Numbers, Agrisolar Europe 2025
